China has delivered a sharp rebuke to Washington and Canberra, and Indonesia has warned of regional concerns, after the two allies bolstered defence ties to increase the US military presence in Australia.

Prime Minister
Julia Gillard
sealed the agreement with US President
Barack Obama
with an assurance that both nations welcomed China’s peaceful rise, while both added a warning that Beijing needed to play by global rules.

Declaring that the US was “here to stay" in the Asia-Pacific, Mr Obama previewed his speech to federal Parliament in Canberra today by describing growth in Asia as vital to the US economic future.

But the Chinese Foreign Ministry last night described the stronger alliance as inappropriate, following a stinging attack in a government-controlled newspaper.

“It may not be quite appropriate to intensify and expand military alliances and may not be in the interest of countries within this region," Foreign Ministry spokesman Liu Weimin told reporters in response to a question on the deployment.

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“China believes that peaceful development and co-operation is a trend of the times and is the mainstream of the foreign policy of countries within this region, especially against the backdrop of sluggish ­economic growth."

Indonesian Foreign Minister Marty Natalegawa told reporters at ASEAN on Wednesday night that the build-up of US forces in Australia could “provoke a reaction and counter-reaction that would create a vicious cycle of tensions and mistrust".

Outspoken Indonesian politician T.B Hasanuddin criticised the announcement and called on the US president to explain the decision to ASEAN countries.

He also said it would create new tensions among the 10-member bloc.

Mr Obama earlier rejected arguments that the defence alliance, and an Asia-Pacific trade agreement including Australia, displayed a fearful response to China’s rise.

“I think the notion that we fear China is mistaken. The notion that we are looking to exclude China is mistaken," he said.

The US deputy national security adviser told reporters travelling with the President the US presence would provide a “reassurance" for peaceful development in the region including the free flow of trade.

Ms Gillard emphasised the defence agreement would result in just 250 US Marines being sent to a Darwin base for six months at a time for joint exercises, while it would build up to 2500 troops within six years. But some US reports portrayed the pact as part of a wider plan to project military might into the region and serve as a counterweight to China’s influence in areas such as the hotly contested South China Sea.

Based on White House briefings, the US reports highlighted not only the deployment of Marines to Darwin but also an increase in American warships visiting West Australian ports and more access by the US Air Force to Australian facilities.

Mr Obama’s comments came at a press conference in Parliament House last night after he arrived in the capital for his first visit to Australia as US head of state.

He is expected to outline a strategy for stronger engagement in Asia in an address to a joint sitting of federal Parliament in Canberra this morning, hours before going to Darwin to visit troops with Ms Gillard.

The press conference last night was dominated by China’s impact on the region’s economic growth and defence security, days after the US and China traded sharp remarks over American concerns that China deliberately undervalued its currency to gain an advantage for its exporters.

“The United States of America has no stronger ally than Australia," the US president said.

Mr Obama laid out two key messages for his visit to the Asia-Pacific, including an agenda to tap into the world’s fastest growing economic region and create jobs in the US.

“The second message I’m trying to send is we are here to stay," he said.

“This is a region of huge strategic importance to us and I’ve made very clear, and I’ll amplify in my speech to Parliament tomorrow, that even as we’ve made a whole host of important fiscal decisions back home, this [region] is right up there at the top of my priority list.

“I want to make sure that we are able to fulfil our leadership role in the Asia-Pacific region."

Mr Obama said the US welcomed a rising, peaceful China but said its rise came with new responsibilities.

“It’s important for them to play by the rules of the road and in fact help underwrite the rules that have allowed so much remarkable economic progress to be made in the last several decades," he said.

While there was a “win win" when China was playing by the rules, there were going to be times when the country did not play by the rules, he said.

At those times, Mr Obama added, the US would send a clear message that China needed to be “on track" with other nations.

Ms Gillard sought to play down concerns about economic and military competition between China and the US, but also backed the US message about China’s need to abide by global rules.

“Both our nations are deeply engaged with China as it rises, and we want to see China rise into the global rules-based order," she said.

“That’s our aspiration and I understand it’s been the aspiration of the United States."

Ms Gillard argued there was a “continuity" between all the regional measures including the trade talks at the Asia-Pacific Economic Co-operation summit, the defence agreement in Australia and the looming talks at the East Asia Summit this weekend.

The defence agreement means thousands more US troops will conduct war games on Australian soil and military hardware will be stored at Australian facilities.

In a long-anticipated announcement, Mr Obama and Ms Gillard said that up to 2500 Marines would come to Australia for training and exercise for periods of up to six months each year by 2016-17.

Troop numbers would step up gradually from 250 next year to 2500 over six years and the forces would train both jointly with Australian troops and on their own, and be rotated through the Australian Army’s Robertson Barracks in ­Darwin.

Government sources said the troops would train in everything from humanitarian disaster relief to combat operations, at the Bradshaw and Mt Bundy training ranges, but denied the military show of strength was aimed at China.

The move is expected to result in the US deploying more warships, fighters and transport aircraft to Australia to support its military operations.

It is part of Mr Obama’s realignment of force posture to meet Washington’s renewed security emphasis on the Asia-Pacific region and is viewed as a direct response to the rise of China.

Though a senior Australian diplomatic official denied last night the initiative was aimed at any one country, China, along with India, Japan, Indonesia and South Korea, had all been informed before it was announced.

The US visit began one day after Ms Gillard announced her intention to gain ALP approval to export uranium to India, triggering talk of closer relations between the US, Australia and India.

Mr Obama said the uranium decision was a bilateral matter for Australia and India but noted it was “complementary" to global policies, including those of the US.

“I will watch with interest what’s determined, but this is not something between the United States and Australia. This is signed between India and Australia," he said.

Concerns about security in the South China Sea have characterised much of the US coverage of Mr Obama’s visit.

The head of the US Pacific Command, Admiral Robert Willard, made it clear this week that Australia had sought the increase in US forces rather than the other way around. “It’s been very much a part of the public record that Australia made overtures to the United States to increase our engagement with the armed forces of Australia and our utility of the training facilities – ranges, and so forth – that are there," Admiral Willard said.